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Greylock Partners Announces Unique $500 Million Venture to act as Seed Capital Funding for Earliest Stage Startups

Reporter: Stephen J. Williams, Ph.D.

Greylock Partners CEO Reid Hoffman announces a $500 million fund to help the earliest stage startups find capital.

See video below:

https://www.bloomberg.com/multimedia/api/embed/iframe?id=798828e9-7850-4c83-9348-a35d5fad3e1c

https://www.bloomberg.com/news/videos/2021-09-24/intv-sara-guoh-greylock-partners-video

See transcript from Bloomberg.com

00:00This is a lot of money for seed stage deals which is typicallysmaller. Why do you want to make seed such a priority.

00:09So see it has always been a priority for us. We’ve been activeat this stage for a long time and some of our biggest wins

00:15historically have been incubation and seed. So I think companieslike Workday and Palo Alto Networks and more recently abnormal

00:21and Snorkel. And then this year 70 percent of our investmentsyou must mints or seeds before we announce this fund. And so

00:29when we saw this level of opportunity we also want to make surewe had enough funding to really back entrepreneurs and to

00:36support them through their journey and make sure entrepreneursalso know they have different options at the seed for the type

00:41of partners they work with. Now at the seed stage you’re talkingabout companies in their infancy. How early are you investing. I

00:49mean is this ideas on a napkin stage with a couple ofentrepreneurs that you believe in or is it beyond that.

00:58So there definitely is a whole range. We don’t catch everysingle person. Like the day they left their job. Right. But you

01:04know abnormal was to see it in 2018 when it was a slide deck andtwo co-founders. We backed another company recently and self on

01:12first capital. That was a repeat founder we have history with.Similarly no product yet. Just an idea and an early team. And so

01:20the range of when we do see it really depends on when weencounter companies. We do like to get to know people as early

01:26as possible. And sometimes that’s the right time for us to writethe check. Obviously Greylock is a multi-stage venture venture

01:32capital firm and I think founders might have the question here.You know if you give me the seed funding we’ll follow on and

01:38reserves come out of that same bucket. And what could this meanin terms of a longer term relationship with Greylock. What’s the

01:46answer to that. So the first thing I’d start with is seeds forus our core investments. Right. So many firms look at them as

01:54options to then follow on. We look at seeds as investments we’retrying to make money on. We’re building a relationship for the

02:01long term to begin with. Right. So. So I’d start with that thenI’d say it is a third of our fund. So it is a big piece of our

02:09investing. And and you know there are many instances where wethen follow on and invest even more because our conviction

02:16continues or even grows. But the point of us doing seed is notjust a follow on it’s to make that investment. How big is each

02:24deal. I mean would you say that seed is the new series A.I think I think that.

02:33Well let’s see the market data would tell us that round sizesoverall have increased for the same level of progress. And I

02:41think that makes sense right. And the reason being the markethas become a lot smarter at the attractiveness of early stage

02:48technology opportunities. And so great returns in tech venturecapital over many years mean there’s more capital than ever and

02:57people are savvier about software and Internet companies. ButI’d say there is you know I think kind of the noble creature

03:04doesn’t matter so much. We think of it as being the firstinstitutional partner to go to a set of founders. The world is

03:12changing quickly. I mean we’re still in the middle of apandemic. And who would’ve known that you know working from home

03:16was going to be a thing 18 months ago. What are the trends thatyou are most excited about right now that you’re doubling down

03:22on at the seed stage.Yeah. So we invest across the technology spectrum business

03:30consumer. The one you just mentioned in terms of just the seachange of the pandemic in terms of how we do our work together

03:36as one. I’m really excited about but we’ve been we’ve beeninvesting in let’s say just this. There’s a shortage globally

03:44because the pandemic. But even before of human connection andand intimacy and people look for it online. And so we invest in

03:53companies like Dischord and Common ROOM and Promotion that helppeople connect more online. So that’s when we’ll continue to

04:00invest in. And then of course we’re investing across all of yourusual range of SAS social data A.I. etc. and then spending more

04:10and more time in fintech and crypto in particular. Now what arethe potential problems with seed stage. Is that at a certain

04:16point as the company develops maybe they pivot they change. Overtime they could potentially ultimately compete with another one

04:23of your core portfolio companies. How do you manage that.So it’s a good question but it is also something that doesn’t

04:30only happen at the scene and funnily enough Greylock has been aninvestor in several companies that were like great companies

04:37post pivot right. So like first semester and discord and nextdoor after they decided to be what they are today. And so that

04:46you know I’d start with the premise of our our philosophy isthat the company should do what’s best for the company. And we

04:53know our our philosophy is to be fully behind companies and notto go invest in a bunch of competitors in a sector just because

04:59we like this sector. But if that were to happen you know wewould we would just divide those interests within the firm and

05:06like make sure that there’s no information flow and just addressit in a reasonable way. I’ve talked with many of your partners

05:12over the years about investing in more women. And I’m curioushow you look at it as an opportunity to potentially you know

05:22spread the wealth a little bit across more women entrepreneurspeople of color people who historically haven’t gotten a chance

05:29in Silicon Valley and Silicon Valley hasn’t benefited from theirideas.

05:34OK. So I’d say this is an issue that’s near and dear to myheart. We are working on it. Two of the last three founders I

05:40backed are women. One is the seed stage founder. One of thefounders. I backed at the seed stage is Hispanic. But. But I

05:49would say you know one thing I want to make sure is clear. Likeyou want to back great founders from diverse backgrounds across

05:56the spectrum. And like we wouldn’t like do it more in seedbecause seed isn’t important. Because it is important to us.

06:02Right. It’s just across the portfolio. This is a priority.

From TechStartups

Source: https://techstartups.com/2021/09/22/greylock-partners-raises-500-million-invest-seed-stage-startups/

Greylock Partners raises $500 million to invest in seed-stage startups

Nickie LouisePOSTED ON SEPTEMBER 22, 2021


Greylock Partners has raised $500 million to invest exclusively in seed-stage startups. The announcement comes a year after the firm raised $1 billion for its 16th flagship fund to invest in early- and growth-stage tech startups.

Guo and general partner Saam Motamedi said in an interview the fund is part of an expansion of a $1.1 billion fund, which we reported last year, to $1.6 billion, The Information reported. The funding is among the industry’s largest devoted to seed investments, which often represent a startup’s first outside capital.

The pool of funds will give the 56-year-old venture capital firm the ability to write large checks at “lean-in valuations” and emphasize its commitment to early-stage investing, said general partner Sarah Guo. In a thread post on Twitter, Greylock said, “We at @GreylockVC  are excited to announce we’ve raised $500M dedicated to seed investing. This is the industry’s largest pool of venture capital dedicated to backing founders at day one.”

Press Release from Grelock

More articles on Venture Capital on this Online Open Access Journal Include:

youngStartup Ventures “Where Innovation Meets Capital” – First Round of VC Firms Announced, August 4th – 6th, 2020.

Real Time Coverage @BIOConvention #BIO2019: Dealmakers’ Intentions: 2019 Market Outlook June 5 Philadelphia PA

Podcast Episodes by THE EUROPEAN VC

Real Time Coverage @BIOConvention #BIO2019: June 4 Morning Sessions; Global Biotech Investment & Public-Private Partnerships

37th Annual J.P. Morgan HEALTHCARE CONFERENCE: News at #JPM2019 for Jan. 8, 2019: Deals and Announcements

Tweet Collection by @pharma_BI and @AVIVA1950 and Re-Tweets for e-Proceedings 14th Annual BioPharma & Healthcare Summit, Friday, September 4, 2020, 8 AM EST to 3-30 PM EST – Virtual Edition

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AI App for People with Digestive Disorders

Reporter: Irina Robu, PhD

3.3.14

3.3.14   AI App for People with Digestive Disorders, Volume 2 (Volume Two: Latest in Genomics Methodologies for Therapeutics: Gene Editing, NGS and BioInformatics, Simulations and the Genome Ontology), Part 2: CRISPR for Gene Editing and DNA Repair

Artificial intelligence (AI) constitutes machine learning and deep learning, which allows computers to learn without being clearly programmed every step of the way. The basic principle decrees that AI is machine intelligence leading to the best outcome when given a problem. This sets up AI well for life science applications, which states that AI can be taught to differentiate cells, be used for higher quality imaging techniques, and analysis of genomic data.

Obviously, this type of technology which serves a function and removes the need for explicit programming. It is clear that digital therapeutics will have an essential role in treatment of individuals with gastrointestinal disorders such as IBS. Deep learning is a favorite among the AI facets in biology. The structure of deep learning has its roots in the structure of the human brain which connect to one another through which the data is passed. At each layer, some data is extracted. For example, in cells, one layer may analyze cell membrane, the next some organelle, and so on until the cell can be identified.

A Berlin-based startup,Cara Care uses AI to help people manage their chronic digestive problems and intends to spend the funding raised getting the app in the hands of gastrointestinal patients in the U.S. The company declares its app has already helped up to 400,000 people in Germany and the U.S. manage widespread GI conditions such as reflux, irritable or inflammatory bowel, food intolerances, Crohn’s disease and ulcerative colitis “with a 78.8% treatment success rate.” Cara Care will also use the funding to conduct research and expand collaborations with companies in the pharmaceutical, diagnostics and food-production industries.

SOURCE
https://www.aiin.healthcare/topics/connected-care/ai-app-digestive-disorders-raises-7m?utm_source=newsletter

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NIH SBIR Funding Early Ventures: September 26, 2018 sponsored by Pennovation

Stephen J. Williams PhD, Reporter

Penn Center for Innovation (Pennovation) sponsored a “Meet with NCI SBIR” program directors at University of Pennsylvania Medicine Smilow Center for Translational Research with a presentation on advice on preparing a successful SBIR/STTR application to the NCI as well as discussion of NCI SBIR current funding opportunities.   Time was allotted in the afternoon for one-on-one discussions with NCI SBIR program directors.

To find similar presentations and one-on-one discussions with NCI/SBIR program directors in an area nearest to you please go to their page at:

https://sbir.cancer.gov/newsevents/events

For more complete information on the NCI SBIR and STTR programs please go to their web page at: https://sbir.cancer.gov/about

A few notes from the meeting are given below:

  • In 2016 the SBIR/STTR 2016 funded $2.5 billion (US) of early stage companies; this is compared to the $6.6 billion invested in early  stage ventures by venture capital firms so the NCI program is very competitive with alternate sources of funding
  • It was stressed that the SBIR programs are flexible as far as ownership of a company; SBIR allows now that >50% of the sponsoring company can be owned by other ventures;  In addition they are looking more favorably on using outside contractors and giving leeway on budgetary constraints so AS THEY SUGGEST ALWAYS talk to the program director about any questions you may have well before (at least 1 month) you submit. More on eligibility criteria is found at: https://sbir.cancer.gov/about/eligibilitycriteria
  • STTR should have strong preliminary data since more competitive; if don’t have enough go for  an R21 emerging technologies grant which usually does not require preliminary data
  • For entities outside the US need a STRONG reason for needing to do work outside the US

Budget levels were discussed as well as  the waiver program, which allows for additional funds to be requested based on criteria set by NCI (usually for work that is deemed high priority or of a specialized nature which could not be covered sufficiently under the standard funding limits) as below:

Phase I: 150K standard but you can get waivers for certain work up to 300K

Phase II: 1M with waiver up to 2M

Phase IIB waiver up to 4M

You don’t need to apply for the waiver but grant offices may suggest citing a statement requesting a waiver as review panels will ask for this information

Fast Track was not discussed in the presentation but for more information of the Fast Track program please visit the website  

NCI is working hard to cut review times to 7 months between initial review to funding however at beginning of the year they set pay lines and hope to fund 50% of the well scored grants

NCI SBIR is a Centralized system with center director and then program director with specific areas of expertise: Reach out to them

IMAT Program and Low-Resource Setting new programs more suitable for initial studies and also can have non US entities

Phase IIB Bridge funding to cross “valley of death” providing up to 4M for 2-3 years: most were for drug/biological but good amount for device and diagnostics

 

Also they have announced administrative supplements for promoting diversity within a project: can add to the budget

FY18 Contracts Areas

3 on biotherapies

2 imaging related

2 on health IT

4 on radiation therapy related: NOTE They spent alot of time discussing the contracts centered on radiation therapy and seems to be an area of emphasis of the NCI SBIR program this year

4 other varied topics

 

Breakdown of funding

>70% of NCI SBIR budget went to grants (for instance Omnibus grants); about 20-30% for contracts; 16% for phase I and 34 % for phase II ;

ALSO the success rate considerably higher for companies that talk to the program director BEFORE applying than not talking to them; also contracts more successful than Omnibus applications

Take Advantage of these useful Assistance Programs through the NIH SBIR Program (Available to all SBIR grantees)

NICHE ASSESSMENT Program

From the NCI SBIR website:

The Niche Assessment Program is designed to help small businesses “jump start” their commercialization efforts. All active HHS (NIH, CDC, FDA) SBIR/STTR Phase I awardees and Phase I Fast-Track awardees (by grant or contract) are eligible to apply. Registration is on a first-come, first-serve basis!

The Niche Assessment Program provides market insight and data that can be used to help small businesses strategically position their technology in the marketplace. The results of this program can help small businesses develop their commercialization plans for their Phase II application, and be exposed to potential partners. Services are provided by Foresight Science & Technology of Providence, RI.

Technology Niche Analyses® (TNA®) are provided by Foresight, for one hundred and seventy-five (175), HHS SBIR/STTR Phase I awardees. These analyses assess potential applications for a technology and then for one viable application, it provides an assessment of the:

  1. Needs and concerns of end-users;
  2. Competing technologies and competing products;
  3. Competitive advantage of the SBIR/STTR-developed technology;
  4. Market size and potential market share (may include national and/or global markets);
  5. Barriers to market entry (may include but is not limited to pricing, competition, government regulations, manufacturing challenges, capital requirements, etc.);
  6. Market drivers;
  7. Status of market and industry trends;
  8. Potential customers, licensees, investors, or other commercialization partners; and,
  9. The price customers are likely to pay.

Commercialization Acceleration Program  (CAP)

From the NIH SBIR website:

NIH CAP is a 9-month program that is well-regarded for its combination of deep domain expertise and access to industry connections, which have resulted in measurable gains and accomplishments by participating companies. Offered since 2004 to address the commercialization objectives of companies across the spectrum of experience and stage, 1000+ companies have participated in the CAP. It is open only to HHS/NIH SBIR/STTR Phase II awardees, and 80 slots are available each year. The program enables participants to establish market and customer relevance, build commercial relationships, and focus on revenue opportunities available to them.

I-Corps Program

The I-Corps program provides funding, mentoring, and networking opportunities to help commercialize your promising biomedical technology. During this 8-week, hands-on program, you’ll learn how to focus your business plan and get the tools to bring your treatment to the patients who need it most.

Program benefits include:

  • Funding up to $50,000 to cover direct program costs
  • Training from biotech sector experts
  • Expanding your professional network
  • Building the confidence and skills to create a comprehensive business model
  • Gaining years of entrepreneurial skills in only weeks.

 

ICORPS is an Entrepreneurial Program (8 week course) to go out talk to customers, get assistance with business models, useful resource which can guide the new company where they should focus on for the commercialization aspect

THE NCI Applicant Assistance Program (AAP)

The SBIR/STTR Applicant Assistance Program (AAP) is aimed at helping eligible small R&D businesses and individuals successfully apply for Phase I SBIR/STTR funding from the National Cancer Institute (NCI), National Institute for Neurological Disorders and Stroke (NINDS), National Heart, Lung and Blood Institute (NHLBI). Participation in the AAP will be funded by the NCI, NINDS, and NHLBI with NO COST TO PARTICIPANTS. The program will include the following services:

  • Needs Assessment/Small Business Mentoring
  • Phase I Application Preparation Support
  • Application Review
  • Team/Facilities Development
  • Market Research
  • Intellectual Property Consultation

For more details about the program, please refer to NIH Notice NOT-CA-18-072.

 

These programs are free for first time grant applicants and must not have been awarded previous SBIR

Peer Learning Webinar Series goal to improve peer learning .Also they are starting to provide Regulatory Assistance (see below)

NIH also provides Mentoring programs for CEOS and C level

Application tips

  1. Start early: and obtain letters of collaboration
  2. Build a great team: PI multi PI, consider other partners to fill gaps (academic, consultants, seasoned entrepreneurs (don’t need to be paid)
  3. They will pre review 1 month before due date, use NIH Project Reporter to view previous funded grants
  4. Specify study section in SF to specify areas of expertise for review
  5. Specific aims are very important; some of the 20 reviewers focus on this page (describes goals and milestones as well; spend as much time on this page as the rest of the application
  6. Letters of support from KOLs are important to have; necessary from consultants and collaborators; helpful from clinicians
  7. Have a phase II commercialization plan
  8. Note for non US clinical trials:  They will not fund nonUS clinical trials; the company must have a FWA
  9. SBIR budgets defined by direct costs; can request a 7% fee as an indirect cost; and they have a 5,000 $ technical assistance program like regulatory consultants but if requested can’t participate in NIH technical assistance programs so most people don’t apply for TAP

 

  • They are trying to change the definition of innovation as also using innovative methods (previously reviewers liked tried and true methodology)

10.  before you submit solicit independent readers

NCI SBIR can be found on Twitter @NCIsbir ‏

Discussion with Monique Pond, Ph.D. on Establishment of a Regulatory Assistance Program for NCI SBIR

I was able to sit down with Dr. Monique Pond,  AAAS Science & Technology Policy Fellow, Health Scientist within the NCI SBIR Development Center to discuss the new assistance program in regulatory affairs she is developing for the NCI SBIR program.  Dr Pond had received her PhD in chemistry from the Pennsylvania State University, completed a postdoctoral fellow at NIST and then spent many years as a regulatory writer and consultant in the private sector.  She applied through the AAAS for this fellowship and will bring her experience and expertise in regulatory affairs from the private sector to the SBIR program. Dr. Pond discussed the difficulties that new ventures have in formulating regulatory procedures for their companies, the difficulties in getting face time with FDA regulators and helping young companies start thinking about regulatory issues such as pharmacovigilence, oversight, compliance, and navigating the complex regulatory landscape.

In addition Dr. Pond discussed the AAAS fellowship program and alternative career paths for PhD scientists.

 

A formal interview will follow on this same post.

 

Other articles on this OPEN ACCESS JOURNAL on Funding for Startups and Early Ventures are given below:

 

Mapping Medical Device Startups Across The Globe per Funding Criteria

Funding Oncorus’s Immunotherapy Platform: Next-generation Oncolytic Herpes Simplex Virus (oHSV) for Brain Cancer, Glioblastoma Multiforme (GBM)

 

Funding Opportunities for Cancer Research

 

Team Profile: DrugDiscovery @LPBI Group – A BioTech Start Up submitted for Funding Competition to MassChallenge Boston 2016 Accelerator

 

A Message from Faculty Director Lee Fleming on Latest Issue of Crowdfunding; From the Fung Institute at Berkeley

 

PROTOCOL for Drug Screening of 3rd Party Intellectual Property Presented for Funding Representation

 

Foundations as a Funding Source

 

The Bioscience Crowdfunding Environment: The Bigger Better VC?

 

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GSK Partners With SG3 Ventures to Add $100 Million to the Pittsburgh Biotech Scene

From Biospace News: Backed by GlaxoSmithKline (GSK), New VC Firm SG3 Ventures Has $100 Million to Bet on Pittsburg Startups

Reporter: Stephen J. Williams, Ph.D.

Source: http://www.biospace.com/News/backed-by-glaxosmithkline-new-vc-firm-sg3-ventures/412039/source=TopBreaking?intcid=homepage-seekernewssection-tabtopbreakingnews

 

Pittsburgh-area entrepreneurs will soon have another funding option for growing early phase startup companies.

Pharmaceutical giant GlaxoSmithKline has thrown its support behind the creation of a $100 million venture capital fund, which will help meet a need for early stage business startup capital in the Pittsburgh area. Philadelphia-based SG3 Ventures anticipates awarding its first round of funding in about a year, according to Brian McVeigh, vice president of worldwide business development transactions and investment management at GSK.

From Pittsburgh Post Gazette: http://www.post-gazette.com/business/healthcare-business/2016/03/11/New-early-stage-venture-fund-forming-with-eye-on-Pittsburgh-startups/stories/201603090016

New early-stage venture fund forming with eye on Pittsburgh startups

Pittsburgh-area entrepreneurs will soon have another funding option for growing early phase startup companies.

Pharmaceutical giant GlaxoSmithKline has thrown its support behind the creation of a $100 million venture capital fund, which will help meet a need for early stage business startup capital in the Pittsburgh area. Philadelphia-based SG3 Ventures anticipates awarding its first round of funding in about a year, according to Brian McVeigh, vice president of worldwide business development transactions and investment management at GSK.

“There is a huge untapped opportunity,” Mr. McVeigh said. “Let’s bring the money here.”

New prescription drug treatments will be a priority for fund investments, but a balanced portfolio including life science technologies is planned.

In the venture ecosystem, insurers, pension funds and other institutions use such funds to invest in promising startup companies — both to balance their portfolios and to get a shot at investment returns that would not otherwise be possible. The venture funds oversee allotting capital to a portfolio of startup companies.

The investment money enables startups to mature and eventually bring in other investors through a public offering or acquisition by a larger company, generating money to repay the initial investors.

GSK and other big pharmaceutical companies are making similar investments to maximize returns and keep their product pipelines full, but GSK has been focusing on earlier stage companies, shifting its focus to pre-clinical technologies about five years ago, Mr. McVeigh said.

In addition, Big Pharma is increasingly relying on outsourced research and development operations, often in collaboration with universities, to fill industry product pipelines. GSK has funded a number of these initiatives, including a cancer collaboration with the University of California, San Diego School of Medicine and Moores Cancer Center.

SG3 Managing Director Keith Marmer said the new venture fund will be committed to technologies developed outside the better known tech hubs of Silicon Valley and Boston-Cambridge.

“We’re here, we’re from here, and we want to be here,” he told a group of entrepreneurs at a recent breakfast meeting in Oakland. “Sustaining technology through research funding isn’t happening anywhere.”

Parsippany N.J.-based GSK closed its consumer health care operations in Moon in 2015, eliminating 274 jobs a year after the company’s merger with Swiss vaccine maker Novartis. Mr. McVeigh works at the company’s offices in King of Prussia, Pa.

With federal research dollars flat in recent years, universities nationwide have been turning to commercialization of intellectual property as a new source of revenue.

At the same time, Pittsburgh’s startup community is showing signs of new life.

Among the signs: Patrick Gallagher’s commitment to the commercialization of faculty research since becoming University of Pittsburgh chancellor 18 months ago, awakening a sleeping giant of economic development and innovation and hospital system UPMC’s creation of a commercial enterprises arm to fund promising technologies.

The timing couldn’t be better for venture capital funds like SG3.

Nationwide, early stage funding has been chasing fewer deals, according to a report by Money Tree, which was compiled by PricewaterhouseCoopers and the National Venture Capital Association based on data provided by Thomson Reuters.

Early stage investments nationally last year totaled $19.8 billion, a 23 percent increase from $16.1 billion in 2014. But the number of deals were essentially flat from the previous year, suggesting that some companies were left out in the cold.

What’s more, the amount of money available to Pittsburgh-area entrepreneurs after the earliest rounds of investment isn’t keeping pace with the innovations coming out of the city’s universities, said Dietrich Stephan, a serial entrepreneur who also chairs the human genetics department at Pitt.

“There’s real substance here,” he said. “Without money, we can’t build.”

Seed investment funding — the earliest level of funding — is not a problem in Pittsburgh, said Buchanan Ingersoll Rooney PC lawyer Jeremy Garvey, who also chairs the Bridgeville-based Pittsburgh Venture Capital Association.

“The predominance of funding in this market comes in the earliest stages,” he said. “Institutional funding is much harder to get in this market.”

Early stage venture funding began drying up with the stock market crash of 2008, which also chilled the financial markets for initial public offerings for biotech companies, Mr. McVeigh said. Eventually, conditions thawed for IPOs, but the lower valuations for new companies than before 2008 made that less attractive than before.

“We’re really energized by the energy there” in Pittsburgh, Mr. McVeigh said. “We’re looking to bring venture capital to the region.”

Kris B. Mamula: kmamula@post-gazette.com

About SG3 Ventures

SG3 Ventures is an early stage life science venture capital firm. Our primary focus in on therapeutics and digital health; however, we will invest opportunistically when presented with a potential vehicle to drive superior returns for our limited partners. We are active in company formation, deploying financial and human resources to help deliver value. In addition, we access deep industry networks to ensure a path to market with strong commercial partnerships built into our companies from the beginning. SG3 prefers to invest in the greater Philadelphia Region (Princeton to the north, Baltimore to the south and Pittsburgh to the west). We prefer to make initial investments at the formation or seed stage with a focus on providing financing through mature rounds of investment.

  • Website

    http://sg3ventures.com

  • Industry

    Financial Services

  • Type

    Partnership

  • Headquarters

    3711 Market Street Suite 800Philadelphia, PA 19104 United States

  • Company Size

    1-10 employees

More articles on the Open Access Journal on Biotech Investing Include

J.P. Morgan 34th Annual Healthcare Conference & Biotech Showcase™ January 11 – 15, 2016 in San Francisco

New Values for Capital Investment in Technology Disruption: Life Sciences Group @Google and the Future of the Rest of the Biotech Industry

Bristol-Myers Squibb: A global BioPharma leader – Tracing the innovative biotech core of $3.7 billion R&D Investment and $16.4 billion in Net Sales

 

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Starting a Biotech the European Way

Author:  Stephen J. Williams, Ph.D.

A wonderful post by Tony Marcel in Nature Biotechnology highlights some of the structural differences in the way biotech startups are formed in Europe contrasted with bio-entrepreneurship as conducted in the United States.  Tony Marcel is currently the CEO of FGene S.A. and gives a personal experience  of the European biotech startup scene and highlights the differences, as he sees it, in the unique business development models occurring in Europe versus the US.  This post will highlight features from the article.

  • US model of biotech is not easily transferable to how Europe does business
  • US model involves developing a specific technology platform then selling that tool, service or platform to pharma for R&D $ and royalties
  • European perspective is to build networks instead of platforms which can deliver capabilities or one product to pharma
  • The article discusses three weaknesses identified in the biotech world with respect to Europe and the US

Three ” weaknesses” identified which may affect decision to start a biotech in Europe include:

  1. European academic scientists have trepidation making deals with big pharma
  2. European scientists are not as eager as US counterparts to start a biotech
  3. biotechs still are not as good as pharma in drug development so even their pipeline of “hits” are failing in clinical trials

The article aims to use these weaknesses to define a European way involving

  • defining management players and market niche early on
  • reducing the barriers to entry (i.e. legal)
  • establishing the relationships to increase viability

 

The full article can be found at the following link:

http://www.nature.com/bioent/2003/030101/full/nbt0299supp_9.html

 

An emerging European model for bioentrepreneurship

Tony Marcel

Tony Marcel is CEO of FGene S.A., 91, Avenue Kléber, 75116 Paris, France

e-mail:  tonymftmcgene@compuserve.com.

The US model for biotechnology is not easily exportable to Europe, but an alternative European business model may be adaptable everywhere.

There is a widespread opinion that biotechnology companies worldwide need to follow business models initiated in the US. These models, generally speaking, are based on development of a specific technology platform. The prevailing wisdom suggests this technology can be sold as a tool or service to pharmaceutical companies or can be used to develop a lead compound that can then be sold to big pharma for R&D dollars and single-digit downstream royalties.

But my experience as a former academic medical researcher who has helped discover, develop, and market drugs for Hoechst, Laboratoires Roussel, Roussel-Uclaf, Rhône-Poulenc Sante, and Amgen has taught me that there is an appealing alternative to this model that may be more practical from the European perspective. Rather than building technologies, one can build networks that have the capability of delivering to big pharma the one product they cannot refuse: validated lead compounds for unmet medical needs.

Identifying a market niche

My background has taught me that an effective way to find solutions is to look at weaknesses perceived by the status quo, and then to develop a strategy to turn them into strengths. Biotechnology’s biggest weakness was its lack of products, in traditional pharmaceutical terms. Relatively few lead compounds have made their way through clinical trials and onto the market. So to separate your company from the crowd, my first conclusion is that it needs to be product-based. It should develop lead compounds that can be sold to big pharma, or take those compounds through clinical trials and to the market.

How do you accomplish this in Europe? I identified three weaknesses from a traditional biotechnology or pharmaceutical perspective that I felt could be developed into strengths. The first was that European scientists are much more risk averse than their American counterparts when it comes to setting up their own business. The legal, financial, and cultural infrastructure to take such a step is far more developed in the US than elsewhere.

The second was that European academic scientists tended to be mistrustful of big pharma’s intentions in licensing discussions. Taking the fruits of their research and developing it into a business is an uncharted area for most, and their unfamiliarity with this process made them cautious.

Finally, biotechnology startups everywhere, not just in Europe, are usually not very efficient in conducting pharmaceutical development. In general, they are discovery-focused companies that lack both the expertise and the contacts in these areas to efficiently manage this process.

These three weaknesses provide the basis for my product-based business plan. The fact that European scientists are not as ready to start companies as in the US makes Europe a source of world-class research not already tied up commercially. In addition, my experience in the pharmaceutical world has demonstrated that a commitment to building a relationship based on trust with scientists and their university licensing departments tremendously enhances the quality of these exchanges and, over time, provides remarkable access to a pipeline of innovative lead compounds.

Finally, the pharmaceutical industry’s move to outsource much of the development and clinical trials process has created a remarkable infrastructure for moving lead compounds through development. One only needed to know when this was appropriate and to have the money to commit to that project to realize a major portion of the development process.

The business model that results from uniting these strengths is a company dedicated not to a specific technology platform, but rather to the development of innovative compounds discovered and patented by academia. The company’s niche is to license in molecules at an early stage and demonstrate proof of principle, and take them through regulatory preclinicals, as well as phase I/II clinicals. At that point, the company licenses its products to big pharma. Profit is generated by the substantial risk-to-reward ratio between the cost of licensing in molecules and the outlicensing price to big pharma.

Management

Contrary to the way many US biotechnology companies are run, the management structure of such a company is not a one-person show. This strategy relies heavily on a supervisory board made up of representatives from European ministries and major European banks. It is also dependent on a scientific advisory board (SAB) with members from key European states. Unlike the boards of some biotechnology companies, the individuals selected are not merely figureheads. They must be committed to an operational role in which they are regularly consulted about the company’s plans.

The key to making this work is to maintain permanent links with academia, the source of new molecules, through publications, meetings, and also through SAB members. One also needs to develop comparable relationships in the pharmaceutical industry in order to keep abreast of licensing-in needs. Using this dual approach, a company will be able to identify discoveries relevant to a major pharmaceutical market before they are published. The company can then select candidates for licensing based on demonstrations of their potentially useful activity, the proof of pilot synthesis and purification capability, and sufficient intellectual property protection.

Given the academic scientist’s aversion to starting a business, where will this network of managers come from? In Europe, the merger and acquisition fever that has hit both the pharmaceutical and banking industries has created a large pool of experienced professionals, acquainted with science, marketing, and business. Some of these individuals will be at a point in their lives where setting up companies is an exciting alternative career.

The challenge for this new generation of European bioentrepreneurs will be to develop their ability to create a new level of cross-talk between inventors and developers. Their core responsibility will be much in keeping with their training: Build and nurture a portfolio of molecules at various stages of development.

Barriers to entry

If this model is so straightforward, why do pharmaceutical companies not eliminate the biotechnology middleman and reap the rewards directly? One of the three premises of this model is that a small biotech company is more able to concentrate on an academic alliance than a large pharmaceutical company. Biotechnology’s close identification with academia through the training of both its management and staff gives it a cultural advantage in assuming this role.

Historically, the model in which big pharma establishes a direct relationship with academia has never proven successful. For example, SmithKline and French invested much of its Tagamet earnings into developing academic alliances to fill its pipelines. Nonetheless, investing a substantial amount of money in these relationships over a significant period of time did not prevent this group from having to merge with Beecham. Nearly every working pharmaceutical executive today has a similar war story.

The reason it has failed for the past 20 years, and is likely to continue to fail for the next 20, is that it concentrates efforts in the hands of the most powerful pharmaceutical companies and key research institutions. The resulting bureaucracy is so overwhelming it not only alienates the scientific innovators, but creates a stifling atmosphere in which decisions simply cannot be made.

But old habits die hard, and this model has long been a tradition in Europe—particularly in France. Therefore, it is likely, if for no other reason than to reap the potential financial returns of such a model, that pharmaceutical companies will continue to make this model work.

However, the important role that biotechnology can play in this process is being recognized by some individuals now in positions of responsibility in pharmaceutical companies, academic institutions, and government offices. These individuals are doing their best to support biotechnology’s role in the development of innovative new medicines.

Viability

If you have read this far, you are probably persuaded by the arguments, but may wonder, “If it is such a great business model, why hasn’t anyone done it before?” Well, they have. In 1995, FGene was founded in France as a company devoted to the development of biopharmaceutical products. The company was initiated by the willingness of the Paris-based Institut Pasteur, a major European academic institution, to license molecules to it. This relationship allowed the beginning of the process I have just described.

The resolve of the French government, key players in academia, the investment community, and the pharmaceutical industry to enhance the growth of biotechnology in France is an opportunity we have seized. We have tried to duplicate in Europe the remarkable links developed between biotechnology startups and academia in the US, and hope to create a viable business serving the needs of the world’s largest pharmaceutical companies that are literally in our backyard.

In three years of existence, FGene already boasts five products in its active development portfolio: a recombinant protein for the treatment of traumatic spinal section; a peptide for the prevention and therapy of cardiovascular and cerebrovascular ischemia, such as coronary diseases; a selective IL2 receptor agonist for the treatment of cancer; a peptide active on kidney and bone for the treatment of bone and mineral balance disorders, such as osteoporosis; and a peptide for improving male pattern sexual arousal.

We are encouraged that we have made this much progress in such a short time. While this model is still not proven in terms of financial success, it provides a much stronger foundation for growing a biotechnology company than most biotechnology business plans currently in use because costs are directly related to the development of marketable products.

Conclusions

For budding European bioentrepreneurs, this model recommends itself for three reasons: First, it uses unexploited resources that are difficult to access through traditional biotechnology or pharmaceutical models. Second, it is based on pharmaceutical customers’ high-priority needs. And third, it provides a company with a burn rate that is in direct proportion to the realization of a marketable product.

This model has first taken hold in France because of a unique set of circumstances, but its applicability seems uthe commitment of a network of individuals to build a new kind of biotechnology company.

My vision is that companies formed will reinvigorate the European pharmaceutical industry. In the end, everyone wins. Academic science has a new route to receive fair payment for their innovations, biotechnology companies show a rapid timeline to profitability, making investors happy, and pharmaceutical companies fill their pipelines with truly innovative medicines. But the real winner in the end will be the consumer—the rapid translation of genomic products will lead to medicines that improve healthcare at an affordable price, in a much shorter time frame than previously possible.

 

source: http://www.nature.com/bioent/2003/030101/full/nbt0299supp_9.html

More articles on BioEntrepreneurship in this Online Open Access Journal Include:

11:00AM – 10/1/2014: Scientific Collaborations @14th Global Partnering & Biotech Investment, Congress Center Basel – SACHS Associates, London

9:00AM 10/1/2014: Partnering I @14th Global Partnering & Biotech Investment, Congress Center Basel – SACHS Associates, London

BioTech Partnerships and the National Model in Israel

Four Startups After One Year: BioDesign Entrepreneurship Program @ Hebrew University-Hadassah Medical Center

Biotech Chinese and Israeli Strategic Collaboration: Pontifax and WuXi PharmaTech (Cayman) Inc. (NYSE: WX)

Top 10 Israeli medical advances to watch in 2014 @ ISRAEL21c

Israel’s Innovation System: A Triple Helix with Four Sub-helices

Helix Model of Innovation in Israel: The Global Scheme and its Local Application

i-CORE Participation In Israel: Hebrew University faculty leads and holds Scientific Management Positions in Five I-CORE Centers

Stem Cell Research — The Frontier is at the Technion in Israel

Next-generation Universal Cell Immunotherapy startup Adicet Bio, Menlo Park, CA is launched with $51M Funding by OrbiMed

Recent Breakthroughs in Cancer Research at the Technion-Israel Institute of Technology- 2015

BEYOND THE “MALE MODEL”: AN ALTERNATIVE FEMALE MODEL OF SCIENCE, TECHNOLOGY AND INNOVATION

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AGTC (AGTC) , An adenoviral gene therapy startup, expands in Florida with help from $1 billion deal with Biogen

Reporter: Stephen J. Williams, Ph.D.

from Biospace News

AGTC Sets Up Shop in Florida, New Facility to House 75 Employees
February 17, 2016
By Alex Keown, BioSpace.com Breaking News Staff

GAINESVILLE, Fla. — Applied Genetic Technologies Corporation (AGTC), a biotechnology company researching adeno-associated virus (AAV)-based gene therapies for the treatment of rare diseases, is expanding into the rapidly growing north central Florida biotech corridor.

The company, which was founded on technology developed at the University of Florida, is opening a combined use corporate office and laboratory facility in Alachua, Fla. AGTC’s portion of the new multi-tenant facility is expected to accommodate up to about 75 people and consists of approximately 20,000 square feet including state-of-the-art lab and office space as well as space for future expansion, the company announced this morning.

“The new facility will help us to accelerate our research and development efforts for novel AAV-based gene therapies for rare diseases and house critical corporate functions including finance, quality assurance and project management, while providing ample space as we continue to bring new talent to our team,” Sue Washer, president and chief executive officer of AGTC said in a statement.

AGTC’s lead product candidates focus on X-linked retinoschisis, achromatopsia and X-linked retinitis pigmentosa, which are inherited orphan diseases of the eye, caused by mutations in single genes that significantly affect visual function and currently lack effective medical treatments. Retinoschisis is a condition in which an area of the retina has separated into two layers. The part of the retina that is affected by retinoschisis will have suboptimal vision, according to the University of Michigan’s Kellogg Eye Center. Achromatopsia is a condition of the eye that is characterized by an absence (partial or total) of color vision. People with the complete form of achromatopsia are unable to perceive any colors and can only see black, white and shades of gray.

AGTC is also pursuing pre-clinical development of treatments for wet AMD using the company’s experience in ophthalmology to expand into disease indications with larger markets.

In August, AGTC’s research was bolstered by a $1 billion deal withBiogen (BIIB) to support the company’s gene-based therapies. As part of the deal, Biogen holds a license to AGTC’s XLRS and XLRP programs and an additional three licenses, BioSpace (DHX) reported in August.

David Day, assistant vice president & director of the Office of Technology Licensing at the University of Florida, touted the growth of the biotech sector in north central Florida.

“AGTC’s progress in developing novel treatments for rare diseases without adequate therapeutic options is a particularly good model for the entire biotechnology sector,” Day said in a statement.

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From Biospace News: GlaxoSmithKline (GSK) and Johnson & Johnson (JNJ)-Backed VC Firm Medicxi Launches $250 Million Fund For Life Science Startups

Reporter: Stephen J. Williams, PhD

original article: http://www.biospace.com/News/glaxosmithkline-and-johnson-johnson-backed-vc-firm/407338/source=TopBreaking


Press release

Medicxi Ventures, Formerly Index Ventures Life Sciences, Launches as an Independent Venture Capital Firm and Announces Closing of a €210m Fund including GSK and Johnson & Johnson Innovation

LONDON, GENEVA and JERSEY, February 2, 2016 /PRNewswire/ —

  • Medicxi Ventures comprises all of the existing life sciences team, portfolio company investments and life sciences funds of Index Ventures
  • GSK and Johnson & Johnson Innovation expand their commitment to the asset-centric approach
  • Index Ventures technology practice remains unchanged

Medicxi Ventures, a new venture capital firm comprising all of the existing life sciences portfolio companies, funds and team from Index Ventures, today announces the close of Medicxi Ventures 1 (MV1), a new €210 million ($250 million) fund that will focus on early-stage life sciences investments. MV1 will predominantly invest in Europe and principally follow the “asset-centric” strategy pioneered by its partners at Index.

By investing in MV1, GlaxoSmithKline (GSK) and Johnson & Johnson Innovation – JJDC, Inc. (JJDC) have renewed and expanded their commitment to the asset-centric approach, following the prior investment in Index Life 6 (IL-6) alongside other financial investors.

Medicxi Ventures starts its operations as one of the largest independent European life sciences focused investment firms. The Company’s mission is to focus on strengthening R&D innovation by providing solutions to unmet medical needs. Collaboration with pharmaceutical companies will continue to be a key strategy helping the firm to deliver on this mission.

Medicxi Ventures will be managed by four General Partners, Francesco De Rubertis, David Grainger, Kevin Johnson and Michèle Ollier, all of whom previously led the life sciences practice of Index Ventures. The four partners will form the executive management of the new firm.

Francesco De Rubertis, General Partner of Medicxi Ventures, said: “We are excited to take this next step in our evolution as a life sciences focused investment firm. A high percentage of the drugs approved every year by the FDA were discovered in European academic labs. By working in close partnership with academia, biotech and the pharmaceutical industry, we are committed to translating this high quality science in Europe into effective new medicines.”

He added: “It has been a privilege working with Neil Rimer, Giuseppe Zocco and the other tech partners at Index Ventures for the last 20 years and we have benefitted from their expertise in investing in and building high growth entrepreneurial companies.”

Dr Moncef Slaoui, Chairman Global Vaccines and GSKs representative on Medicxis Scientific Advisory Board, commented on the announcement: “We are delighted to support the Medicxi team and this early stage investment fund. We believe in the potential to create an exciting pipeline of new medicine candidates by collaborating and investing with an asset-centric model. The team at Medicxi has a proven track record in partnering with world-class entrepreneurs and scientists to translate disruptive science from academia and industry into new medicines with demonstrable patient benefits.”

Dr Richard Mason, Head, Johnson & Johnson Innovation, London, commented: “Johnson & Johnson Innovation is focused on enabling and advancing all stages of science and technology across the world’s most robust innovation ecosystems. We are optimistic that applying the asset-centric investment model of Medicxi across Europe and beyond will uncover the new and highly differentiated science and technology that is needed to turn early stage research into viable products and patient solutions. We are delighted to work closely with the Medicxi team to help increase the productivity and likelihood of success for the life sciences innovation community throughout the region. ”

The Scientific Advisory Board of the new fund will include some of the top R&D and business development executives from the two pharmaceutical companies as well as Medicxi-appointed executives. As in IL-6, the two pharmaceutical companies have not received any specific rights to the portfolio companies.

Neil Rimer, co-founder of Index Ventures, said: “The creation of Medicxi Ventures as a new entity is a natural evolution given that Index’ life sciences team has been operating autonomously within the firm for several years. Whilst Index and Medicxi will operate independently, we retain close ties and look forward to continuing to share ideas and expertise.”

Notes for Editors

About Medicxi Ventures

Medicxi Ventures is based in London, Geneva and Jersey. It comprises all of the legacy portfolio companies, funds and the life sciences team of Index Ventures, and a new €210 million fund (MV1) that will focus on early-stage investments in life sciences. The Company’s mission is to invest and collaborate along the full healthcare continuum focusing on drug discovery and development and pharmaceutical innovation. Leading healthcare companies, GSK and Johnson & Johnson Innovation-JJDC are investors in Medicxi Ventures’ funds.

Medicxi Ventures’ team has been investing in life sciences for over 20 years and has backed many successful companies, including Genmab (Nasdaq Copenhagen: GEN), PanGenetics (sold to AbbVie), Molecular Partners (SWX: MOLN), XO1 (sold to Janssen) Egalet (EGLT), Minerva Neurosciences (NERV) and Versartis (VSAR).

Please see http://www.medicxiventures.com for more information.

About the Medicxi Ventures Executive Team

  • Francesco De Rubertis joined Index in 1997 to lead the firm’s life sciences activity and has been involved with and overseen all of the investments that Index has made in life sciences
  • David Grainger joined Index in 2012. Prior to this, David led an internationally recognised research group in Cambridge University’s Department of Medicine, where he published more than 80 first author papers in leading journals including Nature, Science and Nature Medicine. He is an inventor on more than 150 patents and patent applications.
  • Kevin Johnson has been working with Index since 2003. He focuses on life sciences, especially drug development companies and was part of the management team that floated Cambridge Antibody Technology on the London Stock Exchange. Two of his products, Humira (Abbott Pharmaceutical) and Benlysta (Human Genome Sciences, GSK), are now on the market.
  • Michèle Ollier joined Index in 2006. She has spent more than 15 years in several development and marketing positions at Sanofi International, Bristol-Myers Squibb, RPR/Gencell/Aventis international and Serono International.

For further information, please contact:

Francesco De Rubertis
General Partner, Medicxi Ventures
francesco@medicxiventures.com
+44(0)207-154-2020

Katja Stout, Sylvie Berrebi
Citigate Dewe Rogerson
katja.stout@citigatedr.co.uk
Sylvie.berrebi@citigatedr.co.uk
+44(0)207-638-9571

Bill Douglass
Gotham Communications LLC
bill@gothamcomm.com
+1(646)504-0890

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Meeting Announcement: Pharmaceutical Consultant Consortium International Announces Presentation by ViFant and Penn Center For Innovation

As announced on the PCCI website:

PCCI invites you to attend a presentation by:

VIFANT (Penn Center for Innovation)

Monday, November 9, 2015, 6:30PM; at the Chesterbrook (Wayne, PA) Embassy Suites Hotel (directions below)

Sponsored by:

To register please click on www.rxpcci.com and follow directions

Vifant is committed to delivering innovative, cost-effective, mobile solutions for the early identification of vision impairment in verbal, non-verbal and pre-verbal patients as young as two months of age.

Early detection of vision problems improves treatment outcome, simplifies treatment and may prevent irreversible neurological damage and blindness. Accurate vision testing in pre-verbal and non-verbal patients is an unmet goal of pediatricians, family doctors, ophthalmologists, early education programs and parents who are interested in discovering vision programs in infants and children as early as possible in order to optimize vision outcomes. Unfortunately, only one-third of all children in the US have had a vision screening test or visual examination prior to entering school as  existing early childhood screening devices detect only risk factors with high false-positive and false-negative rates.

Vifant’s vision acuity test app uses the established principle of optcokinetic nystagmus (OKN) which is the eyes’ reflexive, spontaneous  response to moving patterns that does not need to be instructed or learned. The app is downloaded to a mobile tablet form and the tablet’s front-facing camera and screen provide stimulus and detection of eye movement to allow for identification of the eyes’ response to moving targets. The Vifant vision acuity test is patent protected and is reimbursable under the existing CPT code 99174. In addition to conventional points of service, Vifant’s mobility and ease of use fit well in a telemedicine strategy broadening the patient pool that will benefit from the test.

PROGRAM

6:30: Cocktails and Dinner; there will be a cash bar and a special two-entrée buffet

8:30 Beth DeSouza, CEO, will deliver the Company”s “Elevator” pitch to the group.

8:20: A panel will address three major issues crucial to helping the Company reach the next level. Vifant has submitted the following questions:

  1. Reimbursement challenges and opportunities:Does return on investment on early detection and intervention for a large number of patients outweigh costly treatments later from the payers perspectives and therefore warrant coverage in health plans? What is the role of consumers (parents, caretakers) as payers.
  2. Business model: Subscription fee per HCP or fee per test? Is there a play for remote result interpretation (telemedicine) right away or should it wait?
  3. Competitive landscape: What will be the competitors’ response to Vifant’s entry into the pediatric vision screening space.

 9:00: Q&A session

Remember to register: click on www.rxpcci.com and follow directions

Dinner price for members is a flat $40; Parking is free!

Lifetime dues for new members are still $100; join PCCI and your first dinner will be ON US!

Bring a friend and/or a business colleague! You know that our meetings a livelier and more interesting than ever.

The Embassy Suites Hotel provides an excellent facility, more room and a fine menu.

Every PCCI meeting is webcast. The webcast recording of the PCCI meetings will be posted on the PCCI website “rxpcci.com” and webcast live via the internet during the event.

Directions: Take Rt 202 to the Chesterbrook exit (that’s two exits South of the Devon exit), turn Right at the end of the Exit ramp and you’ll see the hotel at your Right. If you are going North on 202, get off at the Chesterbrook Exit and turn Left at the traffic light and drive back over Rt 202. You’ll see the hotel at your Right. Proceed to the traffic light and turn Right into the parking lot of the hotel. Their phone is: 610 647 6700.

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Protecting Your Biotech IP and Market Strategy: Notes from Life Sciences Collaborative 2015 Meeting

 

Protecting Your Biotech IP and Market Strategy: Notes from Life Sciences Collaborative 2015 Meeting

Achievement Beyond Regulatory Approval – Design for Commercial Success

philly2nightStephen J. Williams, Ph.D.: Reporter

The Mid-Atlantic group Life Sciences Collaborative, a select group of industry veterans and executives from the pharmaceutical, biotechnology, and medical device sectors whose mission is to increase the success of emerging life sciences businesses in the Mid-Atlantic region through networking, education, training and mentorship, met Tuesday March 3, 2015 at the University of the Sciences in Philadelphia (USP) to discuss post-approval regulatory issues and concerns such as designing strong patent protection, developing strategies for insurance reimbursement, and securing financing for any stage of a business.

The meeting was divided into three panel discussions and keynote speech:

  1. Panel 1: Design for Market Protection– Intellectual Property Strategy Planning
  2. Panel 2: Design for Market Success– Commercial Strategy Planning
  3. Panel 3: Design for Investment– Financing Each Stage
  4. Keynote Speaker: Robert Radie, President & CEO Egalet Corporation

Below are Notes from each PANEL Discussion:

For more information about the Life Sciences Collaborative SEE

Website: http://www.lifesciencescollaborative.org/

Or On Facebook

Or On Twitter @LSCollaborative

Panel 1: Design for Market Protection; Intellectual Property Strategy Planning

Take-home Message: Developing a very strong Intellectual Property (IP) portfolio and strategy for a startup is CRITICALLY IMPORTANT for its long-term success. Potential investors, partners, and acquirers will focus on the strength of a startup’s IP so important to take advantage of the legal services available. Do your DUE DIGILENCE.

Panelists:

John F. Ritter, J.D.., MBA; Director Office Tech. Licensing Princeton University

Cozette McAvoy; Senior Attorney Novartis Oncology Pharma Patents

Ryan O’Donnell; Partner Volpe & Koenig

Panel Moderator: Dipanjan “DJ” Nag, PhD, MBA, CLP, RTTP; President CEO IP Shaktl, LLC

Notes:

Dr. Nag:

  • Sometimes IP can be a double edged sword; e.g. Herbert Boyer with Paul Berg and Stanley Cohen credited with developing recombinant technology but they did not keep the IP strict and opened the door for a biotech revolution (see nice review from Chemical Heritage Foundation).
  • Naked patent licenses are most profitable when try to sell IP

John Ritter: Mr. Ritter gave Princeton University’s perspective on developing and promoting a university-based IP portfolio.

  • 30-40% of Princeton’s IP portfolio is related to life sciences
  • Universities will prefer to seek provisional patent status as a quicker process and allows for publication
  • Princeton will work closely with investigators to walk them through process – Very Important to have support system in place INCLUDING helping investigators and early startups establish a STRONG startup MANAGEMENT TEAM, and making important introductions to and DEVELOPING RELATIONSHIOPS with investors, angels
  • Good to cast a wide net when looking at early development partners like pharma
  • Good example of university which takes active role in developing startups is University of Pennsylvania’s Penn UPstart program.
  • Last 2 years many universities filing patents for startups as a micro-entity

Comment from attendee: Universities are not using enough of their endowments for purpose of startups. Princeton only using $500,00 for accelerator program.

Cozette McAvoy: Mrs. McAvoy talked about monetizing your IP from an industry perspective

  • Industry now is looking at “indirect monetization” of their and others IP portfolio. Indirect monetization refers to unlocking the “indirect value” of intellectual property; for example research tools, processes, which may or may not be related to a tangible product.
  • Good to make a contractual bundle of IP – “days of the $million check is gone”
  • Big companies like big pharma looks to PR (press relation) buzz surrounding new technology, products SO IMPORTANT FOR STARTUP TO FOCUS ON YOUR PR

Ryan O’Donnell: talked about how life science IP has changed especially due to America Invests Act

  • Need to develop a GLOBAL IP strategy so whether drug or device can market in multiple countries
  • Diagnostics and genes not patentable now – Major shift in patent strategy
  • Companies like Unified Patents can protect you against the patent trolls – if patent threatened by patent troll (patent assertion entity) will file a petition with the USPTO (US Patent Office) requesting institution of inter partes review (IPR); this may cost $40,000 BUT WELL WORTH the money – BE PROACTIVE about your patents and IP

Panel 2: Design for Market Success; Commercial Strategy Planning

Take-home Message: Commercial strategy development is defined market facing data, reimbursement strategies and commercial planning that inform labeling requirements, clinical study designs, healthcare economic outcomes and pricing targets. Clarity from payers is extremely important to develop any market strategy. Develop this strategy early and seek advice from payers.

Panelists:

David Blaszczak; Founder, Precipio Health Strategies

Terri Bernacchi, PharmD, MBA; Founder & President Cambria Health Advisory Professionals

Paul Firuta; President US Commercial Operations, NPS Pharma

 

Panel Moderator: Matt Cabrey; Executive Director, Select Greater Philadelphia

 

Notes:

David Blaszczak:

  • Commercial payers are bundling payment: most important to get clarity from these payers
  • Payers are using clinical trials to alter marketing (labeling) so IMPORTANT to BUILD LABEL in early clinical trial phases (phase I or II)
  • When in early phases of small company best now to team or partner with a Medicare or PBM (pharmacy benefit manager) and payers to help develop and spot tier1 and tier 2 companies in their area

Terri Bernacchi:

  • Building relationship with the payer is very important but firms like hers will also look to patients and advocacy groups to see how they respond to a given therapy and decrease the price risk by bundling
  • Value-based contracting with manufacturers can save patient and payer $$
  • As most PBMs formularies are 80% generics goal is how to make money off of generics
  • Patent extension would have greatest impact on price, value

Paul Firuta:

  • NPS Pharma developing a pharmacy benefit program for orphan diseases
  • How you pay depends on mix of Medicare, private payers now
  • Most important change which could affect price is change in compliance regulations

Panel 3: Design for Investment; Financing Each Stage

Take-home Message: VC is a personal relationship so spend time making those relationships. Do your preparation on your value and your market. Look to non-VC avenues: they are out there.

Panelists:

Ting Pau Oei; Managing Director, Easton Capital (NYC)

Manya Deehr; CEO & Founder, Pediva Therapeutics

Sanjoy Dutta, PhD; Assistant VP, Translational Devel. & Intl. Res., Juvenile Diabetes Research Foundation

 

Panel Moderator: Shahram Hejazi, PhD; Venture Partner, BioAdvance

  • In 2000 his experience finding 1st capital was what are your assets; now has changed to value

Notes:

Ting Pau Oei:

  • Your very 1st capital is all about VALUE– so plan where you add value
  • Venture Capital is a PERSONAL RELATIONSHIP
  • 1) you need the management team, 2) be able to communicate effectively                  (Powerpoint, elevator pitch, business plan) and #1 and #2 will get you important 2nd Venture Capital meeting; VC’s don’t decide anything in 1st meeting
  • VC’s don’t normally do a good job of premarket valuation or premarket due diligence but know post market valuation well
  • Best advice: show some phase 2 milestones and VC will knock on your door

Manya Deehr:

  • Investment is more niche oriented so find your niche investors
  • Define your product first and then match the investors
  • Biggest failure she has experienced: companies that go out too early looking for capital

Dr. Dutta: funding from a non-profit patient advocacy group perspective

  • Your First Capital: find alliances which can help you get out of “valley of death
  • Develop a targeted product and patient treatment profile
  • Non-profit groups ask three questions:

1) what is the value to patients (non-profits want to partner)

2) what is your timeline (we can wait longer than VC; for example Cystic Fibrosis Foundation waited long time but got great returns for their patients with Kalydeco™)

3) when can we see return

  • Long-term market projections are the knowledge gaps that startups have (the landscape) and startups don’t have all the competitive intelligence
  • Have a plan B every step of the way

Other posts on this site related to Philadelphia Biotech, Startup Funding, Payer Issues, and Intellectual Property Issues include:

PCCI’s 7th Annual Roundtable “Crowdfunding for Life Sciences: A Bridge Over Troubled Waters?” May 12 2014 Embassy Suites Hotel, Chesterbrook PA 6:00-9:30 PM
The Vibrant Philly Biotech Scene: Focus on KannaLife Sciences and the Discipline and Potential of Pharmacognosy
The Vibrant Philly Biotech Scene: Focus on Computer-Aided Drug Design and Gfree Bio, LLC
The Vibrant Philly Biotech Scene: Focus on Vaccines and Philimmune, LLC
The Bioscience Crowdfunding Environment: The Bigger Better VC?
Foundations as a Funding Source
Venture Capital Funding in the Life Sciences: Phase4 Ventures – A Case Study
10 heart-focused apps & devices are crowdfunding for American Heart Association’s open innovation challenge
Funding, Deals & Partnerships
Medicare Panel Punts on Best Tx for Carotid Plaque
9:15AM–2:00PM, January 27, 2015 – Regulatory & Reimbursement Frameworks for Molecular Testing, LIVE @Silicon Valley 2015 Personalized Medicine World Conference, Mountain View, CA
FDA Commissioner, Dr. Margaret A. Hamburg on HealthCare for 310Million Americans and the Role of Personalized Medicine
Biosimilars: Intellectual Property Creation and Protection by Pioneer and by Biosimilar Manufacturers
Litigation on the Way: Broad Institute Gets Patent on Revolutionary Gene-Editing Method
The Patents for CRISPR, the DNA editing technology as the Biggest Biotech Discovery of the Century

 

 

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The Vibrant Philly Biotech Scene: Focus on KannaLife Sciences and the Discipline and Potential of Pharmacognosy

Curator and Interviewer: Stephen J. Williams, Ph.D.

 

philly2nightThis post is the third in a series of posts highlighting interviews with Philadelphia area biotech startup CEO’s and show how a vibrant biotech startup scene is evolving in the city as well as the Delaware Valley area. Philadelphia has been home to some of the nation’s oldest biotechs including Cephalon, Centocor, hundreds of spinouts from a multitude of universities as well as home of the first cloned animal (a frog), the first transgenic mouse, and Nobel laureates in the field of molecular biology and genetics. Although some recent disheartening news about the fall in rankings of Philadelphia as a biotech hub and recent remarks by CEO’s of former area companies has dominated the news, biotech incubators like the University City Science Center and Bucks County Biotechnology Center as well as a reinvigorated investment community (like PCCI and MABA) are bringing Philadelphia back. And although much work is needed to bring the Philadelphia area back to its former glory days (including political will at the state level) there are many bright spots such as the innovative young companies as outlined in these posts.

In today’s post, I had the opportunity to talk with both Dr. William Kinney, Chief Scientific Officer and Thoma Kikis, Founder/CMO of KannaLife Sciences based in the Pennsylvania Biotech Center of Bucks County.   KannaLifeSciences, although highlighted in national media reports and Headline news (HLN TV)for their work on cannabis-derived compounds, is a phyto-medical company focused on the discipline surrounding pharmacognosy, the branch of pharmacology dealing with natural drugs and their constituents.

Below is the interview with Dr. Kinney and Mr. Kikis of KannaLife Sciences and Leaders in Pharmaceutical Business Intelligence (LPBI)

 

PA Biotech Questions answered by Dr. William Kinney, Chief Scientific Officer of KannaLife Sciences

 

 

LPBI: Your parent company   is based in New York. Why did you choose the Bucks County Pennsylvania Biotechnology Center?

 

Dr. Kinney: The Bucks County Pennsylvania Biotechnology Center has several aspects that were attractive to us.  They have a rich talent pool of pharmaceutically trained medicinal chemists, an NIH trained CNS pharmacologist,  a scientific focus on liver disease, and a premier natural product collection.

 

LBPI: The Blumberg Institute and Natural Products Discovery Institute has acquired a massive phytochemical library. How does this resource benefit the present and future plans for KannaLife?

 

Dr. Kinney: KannaLife is actively mining this collection for new sources of neuroprotective agents and is in the process of characterizing the active components of a specific biologically active plant extract.  Jason Clement of the NPDI has taken a lead on these scientific studies and is on our Advisory Board. 

 

LPBI: Was the state of Pennsylvania and local industry groups support KannaLife’s move into the Doylestown incubator?

 

Dr. Kinney: The move was not State influenced by state or industry groups. 

 

LPBI: Has the partnership with Ben Franklin Partners and the Center provided you with investment opportunities?

 

Dr. Kinney: Ben Franklin Partners has not yet been consulted as a source of capital.

 

LPBI: The discipline of pharmacognosy, although over a century old, has relied on individual investigators and mainly academic laboratories to make initial discoveries on medicinal uses of natural products. Although there have been many great successes (taxol, many antibiotics, glycosides, etc.) many big pharmaceutical companies have abandoned this strategy considering it a slow, innefective process. Given the access you have to the chemical library there at Buck County Technology Center, the potential you had identified with cannabanoids in diseases related to oxidative stress, how can KannaLife enhance the efficiency of finding therapeutic and potential preventive uses for natural products?

 

Dr. Kinney: KannaLife has the opportunity to improve upon natural molecules that have shown medically uses, but have limitations related to safety and bioavailability. By applying industry standard medicinal chemistry optimization and assay methods, progress is being made in improving upon nature.  In addition KannaLife has access to one of the most commercially successful natural products scientists and collections in the industry.

 

LPBI: How does the clinical & regulatory experience in the Philadelphia area help a company like Kannalife?

 

Dr. Kinney: Within the region, KannaLife has access to professionals in all areas of drug development either by hiring displaced professionals or partnering with regional contract research organizations.

 

LPBI  You are focusing on an interesting mechanism of action (oxidative stress) and find your direction appealing (find compounds to reverse this, determine relevant disease states {like HCE} then screen these compounds in those disease models {in hippocampal slices}).  As oxidative stress is related to many diseases are you trying to develop your natural products as preventative strategies, even though those type of clinical trials usually require massive numbers of trial participants or are you looking to partner with a larger company to do this?

 

Dr. Kinney: Our strategy is to initially pursue Hepatic Encephalophy (HE) as the lead orphan disease indication and then partner with other organizations to broaden into other areas that would benefit from a neuroprotective agent.  It is expected the HE will be responsive to an acute treatment regimen.   We are pursuing both natural products and new chemical entities for this development path.

 

 

General Questions answered by Thoma Kikis, Founder/CMO of KannaLife Sciences

 

LPBI: How did KannaLife get the patent from the National Institutes of Health?

 

My name is Thoma Kikis I’m the co-founder of KannaLife Sciences. In 2010, my partner Dean Petkanas and I founded KannaLife and we set course applying for the exclusive license of the ‘507 patent held by the US Government Health and Human Services and National Institutes of Health (NIH). We spent close to 2 years working on acquiring an exclusive license from NIH to commercially develop Patent 6,630,507 “Cannabinoids as Antioxidants and Neuroprotectants.” In 2012, we were granted exclusivity from NIH to develop a treatment for a disease called Hepatic Encephalopathy (HE), a brain liver disease that stems from cirrhosis.

 

Cannabinoids are the chemicals that compose the Cannabis plant. There are over 85 known isolated Cannabinoids in Cannabis. The cannabis plant is a repository for chemicals, there are over 400 chemicals in the entire plant. We are currently working on non-psychoactive cannabinoids, cannabidiol being at the forefront.

 

As we started our work on HE and saw promising results in the area of neuroprotection we sought out another license from the NIH on the same patent to treat CTE (Chronic Traumatic Encephalopathy), in August of 2014 we were granted the additional license. CTE is a concussion related traumatic brain disease with long term effects mostly suffered by contact sports players including football, hockey, soccer, lacrosse, boxing and active military soldiers.

 

To date we are the only license holders of the US Government held patent on cannabinoids.

 

 

LPBI: How long has this project been going on?

 

We have been working on the overall project since 2010. We first started work on early research for CTE in early-2013.

 

 

LPBI: Tell me about the project. What are the goals?

 

Our focus has always been on treating diseases that effect the Brain. Currently we are looking for solutions in therapeutic agents designed to reduce oxidative stress, and act as immuno-modulators and neuroprotectants.

 

KannaLife has an overall commitment to discover and understand new phytochemicals. This diversification of scientific and commercial interests strongly indicates a balanced and thoughtful approach to our goals of providing standardized, safer and more effective medicines in a socially responsible way.

 

Currently our research has focused on the non-psychoactive cannabidiol (CBD). Exploring the appropriate uses and limitations and improving its safety and Metered Dosing. CBD has a limited therapeutic window and poor bioavailability upon oral dosing, making delivery of a consistent therapeutic dose challenging. We are also developing new CBD-like molecules to overcome these limitations and evaluating new phytochemicals from non-regulated plants.

 

KannaLife’s research is led by experienced pharmaceutically trained professionals; Our Scientific team out of the Pennsylvania Biotechnology Center is led by Dr. William Kinney and Dr. Douglas Brenneman both with decades of experience in pharmaceutical R&D.

 

 

LPBI: How do cannabinoids help neurological damage? -What sort of neurological damage do they help?

 

Cannabinoids and specifically cannabidiol work to relieve oxidative stress, and act as immuno-modulators and neuroprotectants.

 

So far our pre-clinical results show that cannabidiol is a good candidate as a neuroprotectant as the patent attests to. Our current studies have been to protect neuronal cells from toxicity. For HE we have been looking specifically at ammonia and ethanol toxicity.

 

 

– How did it go from treating general neurological damage to treating CTE? Is there any proof yet that cannabinoids can help prevent CTE? What proof?

 

We started examining toxicity first with ammonia and ethanol in HE and then posed the question; If CBD is a neuroprotectant against toxicity then we need to examine what it can do for other toxins. We looked at CTE and the toxin that causes it, tau. We just acquired the license in August from the NIH for CTE and are beginning our pre-clinical work in the area of CTE now with Dr. Ron Tuma and Dr. Sara Jane Ward at Temple University in Philadelphia.

 

 

LPBI: How long until a treatment could be ready? What’s the timeline?

 

We will have research findings in the coming year. We plan on filing an IND (Investigational New Drug application) with the FDA for CBD and our molecules in 2015 for HE and file for CTE once our studies are done.

 

 

LPBI: What other groups are you working with regarding CTE?

 

We are getting good support from former NFL players who want solutions to the problem of concussions and CTE. This is a very frightening topic for many players, especially with the controversy and lawsuits surrounding it. I have personally spoken to several former NFL players, some who have CTE and many are frightened at what the future holds.

 

We enrolled a former player, Marvin Washington. Marvin was an 11 year NFL vet with NY Jets, SF 49ers and won a SuperBowl on the 1998 Denver Broncos. He has been leading the charge on KannaLife’s behalf to raise awareness to the potential solution for CTE.

 

We tried approaching the NFL in 2013 but they didn’t want to meet. I can understand that they don’t want to take a position. But ultimately, they’re going to have to make a decision and look into different research to treat concussions. They have already given the NIH $30 Million for research into football related injuries and we hold a license with the NIH, so we wanted to have a discussion. But currently cannabinoids are part of their substance abuse policy connected to marijuana. Our message to the NFL is that they need to lead the science, not follow it.

 

Can you imagine the NFL’s stance on marijuana treating concussions and CTE? These are topics they don’t want to touch but will have to at some point.

 

LPBI: Thank you both Dr. Kinney and Mr. Kikis.

 

Please look for future posts in this series on the Philly Biotech Scene on this site

Also, if you would like your Philadelphia biotech startup to be highlighted in this series please contact me or

http://pharmaceuticalintelligence.com at:

sjwilliamspa@comcast.net or @StephenJWillia2  or @pharma_BI.

Our site is read by ~ thousand international readers DAILY and thousands of Twitter followers including venture capital.

 

Other posts on this site in this VIBRANT PHILLY BIOTECH SCENE SERIES OR referring to PHILADELPHIA BIOTECH include:

The Vibrant Philly Biotech Scene: Focus on Computer-Aided Drug Design and Gfree Bio, LLC

RAbD Biotech Presents at 1st Pitch Life Sciences-Philadelphia

The Vibrant Philly Biotech Scene: Focus on Vaccines and Philimmune, LLC

What VCs Think about Your Pitch? Panel Summary of 1st Pitch Life Science Philly

1st Pitch Life Science- Philadelphia- What VCs Really Think of your Pitch

LytPhage Presents at 1st Pitch Life Sciences-Philadelphia

Hastke Inc. Presents at 1st Pitch Life Sciences-Philadelphia

PCCI’s 7th Annual Roundtable “Crowdfunding for Life Sciences: A Bridge Over Troubled Waters?” May 12 2014 Embassy Suites Hotel, Chesterbrook PA 6:00-9:30 PM

Pfizer Cambridge Collaborative Innovation Events: ‘The Role of Innovation Districts in Metropolitan Areas to Drive the Global an | Basecamp Business

Mapping the Universe of Pharmaceutical Business Intelligence: The Model developed by LPBI and the Model of Best Practices LLC

 

 

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